For Jawbone and Its CEO, a Second Chance to Lead the Gadget Pack

It was every CEO’s nightmare. Just about a year ago Hosain Rahman and his San Francisco-based company debuted Up, a personal health gadget. The slim, rubberized wristband had buzz, the early-adopter set was loving it, and on Black Friday the $99 chunks of electronics were being snapped up like so many candy canes. Total devices sold was in the six figures, according to Rahman. It was the fastest-selling product Jawbone had ever launched. In other words, it was a hit.

But then those same early-adopters started to report that the little flexible computer wasn’t working. The battery was failing. The thing just bricked. From a sellout product, to an apology and a refund for everyone who bought them in three weeks. In other words, it was a nightmare.

Rahman, by all accounts handled the snafu masterfully. If you bought an Up band, it’s hard to imagine you have anything but respect for the deluge of customer service that came your way. The chatter at the time certainly reflected that.

But the biggest promise Rahman made wasn’t about refunds, but that Up would be back. That the device would deliver on all the buzz and all the anticipation that had bubbled up around it a year ago. Today, the Up is back, and despite a year lost to emerging competitors like Nike and its FuelBand, Rahman is excited as ever about the Up’s potential. “It’s very simple,” Rahman says. “I want this thing to do what it is supposed to do.”

A year is an eternity in the consumer electronics business. Last year’s breakout hit is today’s dowdy piece of tech. The question for Jawbone is have they lost too much ground to competitors, in particular Nike? No matter what kind of goodwill Rahman engendered with his apology and refund, there are clearly people who weren’t waiting around for Up, the sequel. They moved on. So will they come back? And did squandering its first-mover status kill Up’s chances?

Michael Gartenberg, a consumer technology analyst at Gartner, doesn’t think so. For starters, it is very early days in the quantified-self gizmo market. In his view the market doesn’t belong to anyone yet. “There hasn’t been a product that has really met the demand for the mass market,” Gartenberg says. “The Nike FuelBand is a great product, but I think it is a band that many consumers, those who aren’t hard-core fitness people, won’t want.” Jawbone’s Up could be the device they do, he says. (Read Mat Honan’s first impressions here.)

The new Up device, while retaining similar looks as the first attempt, has been almost completely re-engineered on the inside. Photo: Jawbone

Of course, no one will want Jawbone’s more mass market device either if it disappoints. Rahman and his team have spent the last year making sure it doesn’t. What caused it to fail last time out was a combination of moisture getting inside the rubber and shorting out the battery, and the internal electronics being too brittle to withstand the twisting and flexing the band was subjected to as people put it on and off and generally fiddled with it. After essentially redesigning the entire guts of the band, Rahman is confident they have a device that will stand up to the real-life rigors of how people will use it. And with an expanded software offering, that includes a simpler way to track what you eat and how you feel, among other things, Rahman is also convinced it will appeal to a wide audience – he’s talking millions of people. “One of the things we have learned in the past year is that this is a very big market,” Rahman says. “It goes from the hardcore life hackers to people who have never though about this stuff at all.”

Rahman also learned a lot about himself and the company he runs in the past year. “You want to be the kind of company that can bounce back fast from an adverse event, that can say, ‘ok, how do we fix this, how do we make this better?’ “ Rahman says. “Hopefully, we are that company.” Starting today, he’s about to find out.

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